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Frequently asked questions

Citizens of any country covered by SEPA (Single Euro Payments Area) may
invest on Žltý melón; provided they are over 18 years old, have full
legal capacity, and have a bank account in one of the SEPA countries.

You invest your money by offering to fund part of a borrower’s loan
through the specific auctions that you choose on Žltý melón platform.
When doing so, you must always indicate the amount you want to invest
and the interest rate at which you are willing to offer funds to the
borrower. After the borrower accepts your offer, which is then combined
with funds from other investors, the money for the loan is transferred
to the borrower’s account.

Every time you lend money and a
borrower accepts your offer you will receive a confirmation with the
amount you invested and the interest rate for your investment that you
indicated in your offer.

Before you are able to make your first
investment, you need to register on the Žltý melón website and fund your
Žltý melón investment account (the minimum amount you must fund your
account with is the amount you have offered to invest and fund the
borrower’s loan with).

The entire registration and investment
process is quick and easy, meaning you can start investing and earning
money on the site the same day you register. You can find more
information about registration and making your first investment in the
‘How the investment process works’ section.

The minimum amount you must deposit on Žltý melón to begin investing is
25 EUR / 500 CZK and there is no maximum limit for your total investment
portfolio (the combined amount of all of your investments in individual
loans). However, to help secure your investment and provide you with
some protection against potential risks, you can only invest a maximum
of 250 EUR / 6 500 CZK in any one individual loan.

We
strongly advise you to sufficiently diversify your investments across
as many loans as possible that meet the criteria you have decided on for
your investment strategy, as doing so will help ensure more stable
returns on your investment and limit your exposure to risk.

Žltý melón provides investors with a recommended interest rate for every
loan that is both fair for borrowers and also reflects the level of
risk for investors as determined during our assessment process and
indicated by the credit scoring category assigned to the borrower.

The
recommended interest rate is calculated based on a number of factors,
including our detailed knowledge of the current standard conditions in
the lending market, so that it is fair to both borrowers and investors,
while also including a risk premium set by our comprehensive evaluation
of the original loan application. The risk premium is determined during
our assessment process and reflects the risk to investors that a
borrower will default on a loan, meaning that with sufficient
diversification of an investor’s portfolio the income from loans that
are repaid should cover any potential losses resulting from investment
in any loans that are not repaid and eventually default.

The
recommended interest rates provided by our system are not binding and it
is ultimately up to each individual investor to determine the exact
interest rate for their offer to fund any individual loan, which is
based primarily on their expected return on investment and the level of
risk they are willing to accept as part of their investment strategy.

The
average overall return on investment for the entire portfolio of loans
provided on Žltý melón since we started operating in 2005 is more than
8% p.a.

You can find more detail information about the current
performance of investments and loans on Žltý melón in the 'Statistics'
section of our website).

Although we provide investors with a recommended interest rate, it is
ultimately up to each individual investor during the loan auction to set
the interest rate at which they are willing to offer to fund part of a
borrower’s loan. In standard loan auctions – where the interest rates
are determined by investors rather than borrowers - setting your own
loan interest rate helps you control how quickly your offer is accepted
by potential borrowers, as well as how much you will earn on your
individual investments.

When setting the interest rate for your
offer to fund a borrowers loan you should keep in mind that when a loan
auction has been fully funded by investors, the offers with the lower
interest rates are the ones that are selected to be combined into the
eventual loan taken out by the borrower. If during the loan auction your
offer to fund a loan is discarded from the auction and replaced by an
offer, or offers, from other investors that are willing to fund the loan
at a lower interest rate, you may still choose to re-enter the auction,
but you will need to offer the borrower a lower interest rate in order
to displace these new investment offers.

Ultimately, the interest
rate you choose to offer a borrower all depends on your requirements
regarding your expected returns on your investment and also how an
individual investment offer fits within your broader investment
portfolio and investment strategy. To calculate an appropriate interest
rate correctly for any given loan auction interest rate you can use our
recommended interest rate as the starting point for your decision, but
in order to ensure your offers are not displaced, it is also important
that you look at the offers currently being made by other investors who
want to fund that particular loan.

The process for setting interest rates works slightly differently in
loan auctions for Preferred Interest Loans, where borrowers determine
their preferred interest rate themselves (at a level not lower than 2%
below our recommended interet rate), which is done when they set up the
loan auction. This interest rate and the type of loan auction is clearly
marked so that investor can quickly and easily decide if they are
interested in making an offer to fund the loan at the interest rate set
by the borrower.

While this type of loan auction provides less control and flexibility
for investors, it also provides greater security in terms of earning
more stable returns and finding enough loans to invest in, as once an
investor chooses to invest at the interest rate set by the borrower they
are guaranteed that if the loan auction is fully funded their offer
will not be displaced by other investors since the loan auction will
immediately terminate and making offers at a lower interest rate is not
possible.

During loan auctions we provide investors with all of the important
information about loan applicants that is necessary to help you decide
if you want to make an offer to fund their loan including information
about their income and expenses, and the risk class. If you need further
information before making your final decision you also can ask
borrowers additional questions to make sure you are making the correct
investment decision based on your chosen investment strategy.

Every applicant for a loan on Žltý melón must first pass our
comprehensive evaluation process, which verifies their personal
credibility, current financial situation and ability to meet their
repayment obligations. Only individuals with a clear background and who
we have identified as being highly likely to repay their loans
consistently and on time can borrow through Žltý melón.

Applicants who fail to pass our credit scoring assessment, who have
negative credit history, or who do not meet all of the required
eligibility criteria borrowers cannot access loan auctions and attempt
to get their loan funded by investors.

AA represents the lowest risk category
of borrowers, as they are people with a good credit history as well as a
clearly established financial situation that will allow them to easily
make their scheduled loan repayments. At the other end of the spectrum,
borrowers within the D- category, referred to as ‘Sufficient’, represent
the highest risk class of borrowers. However, our stringent evaluation
process ensures that even these applicants have had their financial
circumstances and credit history fully verified, meaning they are able
to consistently repay their credit commitments and other financial
obligations.

Our credit scoring system also places some loan applicants within the
special HR or High-Risk’, category, outside of the normal credit scoring
scale. HR-rated applicants are those that did not meet all of the
necessary criteria during our assessment process to be eligible for a
standard loan on Žltý melón. Nevertheless, in order to be approved as
for an HR loan applicants must still meet most of our evaluation
criteria and information about them must demonstrate there is a
realistic prospect that they will be make their schedule loan
repayments.

We recommend that only experienced investors consider investing in HR
loans, which offer the potential for higher returns on investment but
also carry a greater risk of late repayments or default, and that this
should only be done after a careful evaluation of the higher risks
associated with these investments.

Assigning a credit rating category to each approved loan applicant is a
significant element that can help investors in deciding which loan
auctions fit best within their investment strategy and the desired level
of risk for their investment. The credit rating category is also a key
determining factor used by our system to determine the recommended and
maximum interest rate that investors can offer to borrowers during their
loan auction. However, within these set parameters it is ultimately up
to you as an individual investor to determine the interest rate you are
willing to offer borrowers during a loan auction.

When investing on Žltý melón, you should look through all of the loan
auctions currently in progress and assess the details provided for each
of their loan applications. It is important to choose auctions that best
match your investment profile and desired investment strategy.

For borrowers in the credit rating category AA or A, there is a lower
risk of repayment failure than if you were to invest in loan auctions
with borrowers that were assigned a credit rating category of C, D and
D-. However, the higher level of risk associated with these borrowers
also means that the potential returns on your investment are also
higher, as the interest rates paid by borrowers in the lower risk
categories are much lower.

The most important rule that you should follow on Žltý melón, regardless
of your investment profile and strategy, is to ensure you have
sufficient diversification within your investment portfolio, as this
will provide you with more stable returns on your investment and lower
your exposure to the risks associated with any one individual borrower
defaulting on their loan.

You can find more information about how to build a sufficiently
diversified investment portfolio in the ‘Diversifying your investments’
section of our website.

While we are fully confident in the sophisticated nature of our
assessment processes and the benefits of investing on our platform
rather than with a traditional bank, Žltý melón cannot guarantee the
security of your investment.

We are a loan management company, rather than an investment advisory,
meaning we provide you with all of the necessary information on
borrowers and their loan application so that you can make the key
decisions about your investments by yourself.

The most important to realise is that if you sufficiently diversifying
the investments in your portfolio on Žltý melón you will dramatically
reduce your exposure to risk and protect yourself from failures that can
result in you losing your investment.

One of the most important factors for all of the people who invest or
borrow money on Žltý melón is that the whole system is safe, secure and
provides them with the best possible terms for their loan or investment.

This is also our number one priority. Our efforts to create, grow and
operate Žltý melón would be entirely meaningless without this commitment
to provide a safe, fair, and transparent platform for our users.

You can learn more about the risks of investing on Žltý melón and how to
limit your exposure to risk in the ‘Risk management’ section of our
website.

All loan auctions on Žltý melón and other activities on our system
are anonymous; you are only identified by your chosen user name
(nickname) that you create when you first register and can be anything
you want.

Your personal information and data are also kept private and secure. The
system does not disclose any personal information about investors to
borrowers or other users on Žltý melón. We will also never sell or
disclose your personal information, unless required to by law, and we
ensure that all of the data our users provide is encrypted and stored
securely using the highest level industry standards.

You can read more about our commitment to security and your privacy in the Safety and Privacy section of our website.

For security reasons, we do not provide the name or the exact contact
details for borrowers during loan auctions. However, all relevant
information about borrowers, their income, expenses, and their risk
category is available so that you can fully evaluate the loan auction
and make your investment decisions.

You can also ask borrowers additional questions to find out any further
information that you need to make an accurate and informed decision
about whether to make an investment offer to fund their loan.

In the event that a borrower fails to make their scheduled repayments or
defaults on their loan we will provide all of the necessary and
relevant data to investors when appropriate as part of our collections
process.

Borrowers can apply for a standard non-purpose loan through Žltý melón
of up to 10 000 EUR / 250 000 CZK. Standard non-purpose loans are
normally provided by banks or non-banking institutions without requiring
borrowers to provide security in the form of a legal charge against
their property, as is the case with mortgages taken out to purchase a
house or flat.

On Žltý melón both sides benefit from the way our loans are arranged, as
no security is required from borrowers, yet investors can still feel
secure knowing that we have carried out extensive and rigorous checks to
screen loan applicants and ensure they are able and likely to repay
their loan.

Loans are granted and agreed on the basis of legal documentation
prepared by a law firm with extensive experience in this field and that
is similar to the loan contracts used by banks and other financial
institutions. Every borrower that is employed must sign The Agreement on
Wage Deductions in order to obtain their loan after it has been funded
by investors, which helps ensure we can easily collect their agreed
repayments directly in the event they fail to make them on time.

In the event that the borrower defaults on their loan, we act on behalf
of investors to collect the debt and cover all of the upfront costs
associated with pursuing the debt via a legal petition to the
Arbitration Court, where we increase the amount owed by the debtor to
reflect the costs of collection. After the court awards a decision
against the borrower for the debt we work with professional executors to
collect the debt through legal claims against the property of the
borrower.

Our comprehensive debt collection services, provided free of charge to
investors is highly effective and ensures that investors have a high
chance of recovering their money promptly.

Besides accepting the General Terms and Conditions of Žltý melón,
investors also sign the Framework Agreement on Cooperation, which allows
them to access and participate in loan auctions. If they decide to
invest their in loans arranged through Žltý melón on more than one
occasion, there is no need to sign any additional contracts with Žltý
melón or the individual borrowers whose loans they fund.

All investors, whether they make one or multiple investments, receives
the same complete level of service in relation to their investment. This
includes, but is not limited to, providing an investor’s funds to the
borrowers whose loans they have funded as well as calculating and
crediting their virtual account on Žltý melón with the money paid to
them by borrowers through their loan instalment repayments.

In the event that one of the loans an investor has funded is not repaid
promptly or the borrower defaults, we provide a full collections
services that includes communicating with borrowers as well as managing
and covering the costs of any legal action that is required to recover
the full debt owed to investors.

No. Žltý melón strongly recommends that you diversify your investment
into as many borrowers as possible to decrease your exposure to risks
arising from non-repayment and also to help you earn stable returns on
your investment

Our system limits how much you can invest in funding any one individual
borrower’s loan and we recommend that you spread your investment across
at least 40 different loans to ensure your portfolio is sufficiently
diversified. You can achieve this by investing small sums with many
different borrowers, while also paying attention to their age, sex,
region, income group and credit rating category, as these factors will
help further diversify your investments.

You can learn more about diversifying your investment in the “How to create your investment portfolio” section of our website.

Žltý melón actively monitors each borrower and identifies even the first
signs of potential payment failure and potential problem loans. Our
sophisticated debt collection system consists of two parts - soft and
hard collection. This system of debt recovery is highly effective and is
based on procedures and policies that correspond to the standards
developed by banks and other financial institutions in the market.

Compared to these institutions, however, Žltý melón has a significant
advantage as our portfolio is not nearly as large or complex, which
makes managing it expensive and inefficient. Our smaller size,
streamlined business model that is not bogged down by legacy systems and
expertise in this area of consumer lending means we can approach each
non-performing loan individually, developing a tailored approach that is
more efficient and maximises the amount we are able to recover for
investors.

You can learn more out debt collection process in the “Recovery of non-performing loans” section of our website.

Yes. However, Žltý melón has developed a highly effective and full
service debt recovery system, including established partnerships with a
leading law firm and enforcement agencies that specialise in this area,
which it offers to all investors free of charge.

If you nevertheless prefer to deal with the problem of non-repayment
independently, we will provide you with all of the necessary legal
documents and information to do so, including the identity of the
borrower.

Žltý melón tracks the performance of every loan arranged on our
platform, paying specific attention to the individual clients, groups of
clients and specific loans that are determined to have a higher than
average risk. We monitor the repayments and performance of loans within
these high risk classes, as well as amongst other identified types of
borrowers and risk classes, in order to track the development of delays
in repayment and loan defaults.

Based on the data and analysis resulting from the active monitoring of
loan on our platform, we continually review and update our prediction
algorithms for the default rates of loans within individual credit
rating classes, as well as the impact identified trends in
non-performing loans have on the risk premium pricing for loans. When
all of this is put together we are subsequently able to use this
detailed analysis to adjust the recommended interest rates generated by
our system and help ensure our investors are able to earn stable returns
and minimise their exposure to risk.

You can find more information about the current development of default
rates for loans on our platform, as well as about our net interest rate
for investors after accounting for non-performing loans in the
“Statistics” section of our website.

The only standard fee investors pay is the monthly fee for managing
their active investments in loans to borrowers. The fee is a fixed
percentage of the monthly instalment repayments collected from borrowers
and is automatically deducted from the amount collected before it is
transferred to the investor’s account.

However, Žltý melón is not like a traditional bank and so we believe our
profits should be contingent on you making a return on your investment.
For this reason, the monthly investment management fee is not collected
on loans for which the borrower has not made their scheduled instalment
repayment, or if they have repaid only part of it. The investment
management fee applies only to money already invested with loans on our
platform and is not charged on any funds that are currently held in your
account but not yet invested via a loan auction.

You can find further information about the fees we charge in our 'Valid Schedule of Charges' here

Before funding a loan for a borrower through your investment offer in a
loan auction you need to transfer money from your bank account to your
virtual investment account on our platform.

The money you transfer to your Žltý melón account is not held by us, but
is deposited in a separate account opened at a major bank solely for
that purpose and which is separated from the financial resources and all
other bank accounts used by our company. Your money does not leave this
account until a loan is fully agreed with a borrower whose loan you
have funded, at which point the money is transferred directly to the
borrower.

Money held for investors in this manner is not owned by iService, a.s.,
and therefore we do not account for it in our annual returns or
operational budgets, nor do we use it in any other purpose than the one
described above.

Currently, we use the services of two Czech banks with branches in
Slovakia - UniCredit Bank Czech Republic and Slovakia, a.s. and Fio
banka, a.s. - to open and operate these bank accounts on behalf of our
investors.

The financial resources of our company, as well as the funds deposited
on behalf of investors in these separate accounts, are subject to the
protection of the bank deposit guarantee scheme, as determined by the
actual wording of the ‘Czech Act No. 21/1992 Coll. on Banks, as
amended’. This deposit guarantee scheme would provide protection for
investors in the unlikely event that both the firms behind Žltý melón,
as well as the banks where investors funds are deposited, where to
experience financial difficulties and/or file for bankruptcy.

After a loan applicant has successfully passed our comprehensive credit
assessment and verification process they are able to set up a loan
auction and request funding for their loan from investors. Individual
auctions are displayed in the “Auctions” section of our website, which
is only visible to registered users of the platform.

On Žltý melón, there are two main types of auctions - Standard Auction and Risk-less Investment.

For Standard Auctions, the loan auction lasts for a maximum of 7 days.
However, once the auction has been funded by investors to 100% of the
amount requested by the borrower, it will then terminate in 24 hours,
regardless of how long the auction was originally set to last for.

Throughout the duration of the auction, investors can offer an amount of
money they want to invest in the loan and set the interest rate for
which they are willing to lend this amount of money to the borrower. In
order to provide security for investors, the maximum amount an investor
can offer to fund in any one particular loan is set at 250 EUR / 10 000
CZK. Žltý melón will provide investors with a recommended interest rate
for their offer to fund a loan, but the exact conditions under which
investors are willing to lend a borrower money is entirely between them.
During the auction, investors can ask the borrower additional questions
in the ‘Details of your loan’ section of the auction page, in order to
get a clearer picture about the borrower or find out any information not
listed in the standard auction details, which they need to make an
informed decision on whether to make an investment offer to fund the
loan and on what terms.

When the loan is fully funded to 100% of the amount requested by the
borrower, they can choose to end the loan auction early and accept the
conditions offered by the various investors that have chosen to fund
their loan. If not, the auction will continue until the scheduled
termination date and the borrower has the opportunity to wait for other
investors´ offers in the hope of securing a lower interest rate for
their loan.

The system will automatically discard offers from investors with higher
interest rates and replace them with better offers at lower interest
rates if and when they are made by new investors during the course of
the auction. If an investor’s offer is discarded and replaced by a new
offer at a lower interest rate, they are still able to place a new offer
at a lower interest rate in order to replace an existing offer made by
another investor.

The borrower can also end the auction early, even if the loan as not
reached 100% funding for the amount original requested by the borrower,
at which point they will accept the agreed interest rates and conditions
offered by investors for the portion of the loan that has received
funding. A borrower can only choose to end a loan auction early once at
least 500 EUR of their original loan amount has been funded.

Once the loan auction is over, borrowers have the option to accept the
loan if they agree with the terms and conditions offered by investors,
or to reject it. The auction must always be accepted or rejected as a
whole; the borrower cannot accept the offers made by individual
investors separately.

The Risk-less investment auction works in a similar manner, but lasts
for 14 days rather than 7 and in this case borrowers determine the
preferred interest rate for their loan themselves, rather than waiting
for investors to set the interest rate they are willing to offer. The
preferred interest rate set by the borrower is clearly listed in the
auction details, making it easy for potential investors to quickly
decide whether or not they are interested and willing to make an
investment into the loan under the conditions set by the borrower.

While in these auctions investors have less control over setting the
interest rate for their investment, if an investor does decide to accept
the borrower’s listed terms and make an investment offer, they then
have the benefit of a guarantee that their offer will not be discarded
by another investor. This is because the loan auction will immediately
terminate once it reaches 100% funding for the amount requested by the
borrower.

However, although borrowers do set the preferred interest rate for their
loan, if investors do not wish to invest on those terms they may still
also make offer to fund the loan at a higher interest rate (up to 1.5x
the preferred rate set by the borrower), but in these cases they receive
no guarantee and their offer may be discarded by other investors that
make offers at a lower rate.

In case you do not want to enter your investment offers manually, you can use the Investment Manager and its 'Autoinvestment' feature which will make your investment offers for you based on certain criteria you select and which match your desired level of risk and investment strategy.

When setting up the autoinvestment feature, you can either choose to use one our predefined investment strategies, or choose your to create your own. When you do this you will specify the detailed conditions for the loan auctions that you wish to make
investment offers on, such as the borrower's risk class and type of
loan, as well as well as your expected level of earnings from your
investment, which is determined by the interest rates you offer to
borrowers.

Once you have setup the autoinvestment tool, it will continually monitor the current loan auctions available on our platform and make investment offers to borrowers in the loan auctions that meet your chosen investment criteria. In order to keep you updated about the progress of your automatic investments, we will send you notification emails about any investments made in loan auctions that met your specified criteria, as well as any other relevant information about the progress or status of your investment offers and the loan auctions these offers have been made in.

The autoinvestment feature is available to all investors and as such it operates in a way that treats all investors fairly and equally with regards to making automatic investment offers, however in the case where there are more investors willing to fund a loan auction that are needed to fully fund the loan, the autoinvestment system will prioritises the investment offers that have the lowest interest rates and also take into account when they were made.

You may choose to only make investment offers via the autoinvestment tool, however, you can of course also choose to use it in alongside your manual investment offers, which helps ensure you can maximise the returns on your investment by carefully selecting loan auctions that are on the margins of your investment criteria and strategy.

Our system provides you with full control over the use of the autoinvestment feature and it can easily be turned on or off at anytime within the Investment Terminal dashboard of your My Account area.

Yes, in a case you need to collect invested money before the loan is due, you can sell your investment on our Secondary market to another investor. You choose for how much you would like to sell it and agree with a new investor on specific terms.

This is a short-term loan of between 100 to
500 EUR that is repaid over a period of 1-6 months, with no hidden charges and
an affordable fixed interest rate. These loans help borrowers cover any
unexpected shortfalls in their normal income and spending, while also helping
them build up their credit rating with us and avoid the trap of high cost
lenders.

Our Secondary market makes it easy for you to sell any of your active investments on Žltý melón early to other investors in our community, meaning you can quickly turn your investments back into cash when you need it, regardless of how many months are left on the loan.

The way the Secondary Market works is simple:

- The seller creates an auction for the investment they want to sell and the asking price.- Auctions run for a maximum of 7 days but can be cancelled at anytime by the seller for any reason- If a loan repayment is made during this period, the auction will be automatically cancelled- Investments can be purchased instantly by making a bid at or above the asking price for the auction- Buyers can also bid an amount lower than the asking price for the auction, with an expiry date for their offer, which is then either accepted or rejected by the Seller

How pricing works on the Secondary Market

Prices for investments are listed as a % of the current remaining loan principal, which can be a premium price (>100%) or a discount price (<) depending on the type of loan and current repayment status

If an investment is not sold within the 7 day auction period the seller has two options:

- Restart the auction immediately at a reduced price; OR- Wait at least 30 days before restarting the auction, with any asking price they want

If a loan auctions is restarted immediately, the asking price must be reduced by a minimum amount, which is based on the current loan repayment status

- At least 0.1% for 'Good Repayments' (loans with less than 30 days late repayments)- At least 1.0% for 'Late Repayments' (loans with more than 30 days late repayments)- At least 5.0% for Default/Collections (loans where repayment is made via legal enforcement)

If a seller cancels the auction during the 7 day period, it counts as 'unsold' and the price reduction rules mentioned above will apply

How to view the Secondary Market

You can quickly access the Secondary Market via the top menu bar or the dedicated section of the Investment Terminal.

When a borrower makes their scheduled monthly loan instalment repayment,
the part of the instalment payment that is attributable to your
original investment (including both loan principle and interest charges)
is immediately credited to your virtual Žltý melón investment account.
This money can then be reinvested in other loans, or can be transferred
to your bank account.

Of course. You have full control of all of the money in your investment
account and can transfer it back to your bank account at any time you
wish.

The funds available to withdraw includes all of your deposited money
that is not currently invested in loans you have funded (or that is
reserved for loan offers you have made, but that have not yet been
accepted or rejected by the borrower) as well as all the collected
monthly instalment repayments made by borrowers.

We recommend reinvesting your money as often as possible within your
chosen investment strategy, as it allows you to maximise the return on
your original investment.

You can of course transfer the money in your investment account back to
your bank account any time, however, Žltý melón gives you the
opportunity to earn higher returns if you reinvest your money in new
loans. By doing this you will profit by reinvesting through Žltý melón,
especially when compared to the returns you would earn by depositing
your money with a traditional bank.

On Žltý melón, the investor earns money from the loan interest paid by
borrowers as part of their scheduled monthly instalment repayments,
which is taxable in compliance with the Law on Income Tax. Žltý melón
does not pay any taxes on behalf of investors that are associated with
the earnings associated with the returns on their investments in any
loans provided through our platform.

It is for each investor to fulfil this legal obligation in accordance
with the laws of the EU and whichever country or countries they have a
legal tax obligation in as a result of their employment, residency,
nationality or any other factor arising such an obligation under the
applicable laws and regulations of that sovereign power.

You can find more information about how to manage and fulfil this legal
obligation regarding taxation in the “Taxes and contributions” section
of our website.

We are committed to providing you with the most transparent, accurate and helpful statistics about your investment portfolio on Žltý melón, as well as the underlying methodology we use to create those statistics!

How we calculate the Net Interest Rate and Net Investment Returns

The Net Interest Rate statistic for your investment portfolio provides you with a clear indication of what you can actually expect to earn on our platform, taking into account your investment fees, the current mix of loans in your portfolio as well as the expected losses from any loan defaults.

We calculate this statistic using the scheduled monthly installment payments for your current loan portfolio, which includes the repayments of loan principal, interest charges, penalty fees minus our administration fees. We then adjust this amount to take into account the expected losses resulting from any loan defaults as well as expected income you will earn from the legal enforcement and collection of those debts that we undertake on your behalf. These adjustments are based on the historical performance of our loan portfolio and the recovery rates for loan defaults on our platform.

Finally, we take the adjusted monthly installment amount for your investment portfolio and weight it based on the average maturity dates and investment amounts for the individual loans in your portfolio, to provide you with the Net Interest Rate for your investment portfolio on Žltý melón.

This statistic not only allows us to provide you with a simple and highly accurate statistical representation of the current 'real-time' performance of your investment portfolio, but we also use this same methodology to provide statistics about the performance of our entire loan portfolio and the average returns earned by all of our investors.

It also allows us to provide you with a Net Investment Return statistic, which gives you a simple yet highly accurate projection of the future earnings from your investment portfolio on an annual (p.a.) basis, while also fully taking into account the diverse mix of maturity dates and interest rates for the individual loans you have invested in on our platform.

Your Net Investment Return statistic is calculated at the end of each calendar month and therefore reflects the most recent data about your investment portfolio at the end of the previous month.

How we calculate loan default rates and 'Risk Vintages'

Risk Vintages are a standard tool for comparing the quality of a loan portfolio and risk management. The graph we provide you with shows how the levels of loan defaults on our platform has changed over time, based on the most recent loan repayment data and the year loans were provided.

This gives a simple and clear visual overview of the percentage of loans that default on our platform in relation to when they were issued (e.g. the % of loan defaults after 6 months, 12 months or 24 months), as well as how this compares for loans issued in different years (e.g. the % of loan defaults after 6 months for loans made in 2014, 2015 and 2016).

On Žltý melón you have the functionality of the notification centre with unique characteristics.

You can easily try out the new Notification Centre using the new icon at the top of the page to access your personalised “Feed” of investor information.

The notification centre provides you with a constantly updating news feed with all of your notifications about your activity on Žltý melón. The information you can find here is the mostly the same as you have previously received via email, but in an easier to digest format that won’t clog up your email inbox! We have also added several new notifications to help you get the most out of using our platform.

Notifications are divided into several different categories and we have included several filters on the left to help you get the information you want as quickly as possible. You can mark individual messages as ‘read’ or mark multiple messages as ‘read’ at once in order to clean up your news feed.

As well as provide a central location for all of your notifications we have also added the ability for you to ‘follow’ other users on Žltý melón in the same way you would on Twitter or other social networks. This innovative feature will allow you keep track of what your friends or some of our top investors are doing in order to help you learn from other people in our community and increase the profits you earn from your investments.

You can easily follow another investor by searching for their name within the notification centre, or by using the ‘Follow’ button in their investor profile or from within our discussion form. Once you follow an investor information about their investment activity will be displayed in your news feed and if someone follows you they will be updated about your activity.

We are always conscious about protecting your privacy at all times, so if you do not want to share you investment activity with other users it is easy to ‘Block’ any investor that has decided to follow you.

However, based on the activity in our forums we think that most of users will welcome the opportunity to communicate more with each other and therefore we have also added the ability for you to post a short message via the notification centre that will be sent to all of your followers.

We have designed our mobile app specifically for phones (and their small screen size), which means it will load faster, look better and just generally ‘more better’ in pretty much every way to use the app – and you can do it anywhere!

The application will enable you in particular: • Simple and quick access to your investment account • Monitor the status, profitability and composition of your investment portfolio • Access to current investment offers • Investing in new loans • Grant, conversion, or withdrawal from your account • Access the Wallpaper and track all notifications about your portfolio

The app is currently available for mobile devices using the Android operating system that most of our users use. However, we do not forget even the Apple owners of iOS-based devices, for which we are also preparing a version of the mobile app.

To use the app, you need to have your mobile device connected to the internet. The app currently does not support offline mode.

You can also enjoy other features in the future. It will in particular: • Overview and detail of active and discontinued investments • Sales and Investments in the Secondary Market • Autoinvest Management • Follow-up of investors and group management • Overview of transactions • Additional graphs and analytical tools for the portfolio • New user registration

Keep in mind that when investing in peer-to-peer loans you risk your capital as it does not apply any protective mechanism. You can learn more about the risks of peer-to-peer lending and the Žltý melón transparent approach on this page or in the Prospectus of the User. Investors should study both the Prospectus and the The Conflict of Interest before they invest.

Strategic investor: EU-JEREMIE-Fund. Žltý melón is supported by the European Investment Fund as an equity investor through the JEREMIE initiative. You can learn about our company in the section
About us.

When you connect to the Žltý melon portal and working on your investment, auctions, loans, and personal data all data are transmitted encrypted by SSL (Secure Sockets Layer). This ensures that the your information will reach us as you entered it and no one else will read them.